Hansen’s ‘Hail Mary’

Yesterday the Hansen Group threw up a ‘Hail Mary’ by sending a letter to the Seattle City Council on a possible redevelopment plan of their own for KeyArena. As I’ve said in KeyArena_SoDoGroupprevious posts, the three main challenges for SoDo is the lack of money, no NHL partner, and political support inside and outside city hall. His potential plan for KeyArena is interesting, but does nothing to address those challenges.

The proposal

The proposal would subdivide KeyArena into 3 separate venues: a 500-seat theater, 3000-seat covered amphitheater and 6200-seat indoor concert venue. If there wasn’t already a viable redevelopment plan to accommodate NHL and NBA team, i.e. OVG’s proposal, I think this would be an interesting proposal. The Hansen Group would not start this Amp_KeyArena_Hansenproject until after a SoDo arena would be completed. Based on the information posted on Hansen’s website, the SoDo arena would still not begin until an NBA or NHL team is procured. Based on a Steve Ballmer interview last spring, he estimates the NBA in Seattle is closer to 10 years away than 5. You add it all up and we would be looking at about 2027 for SoDo to be open at which time I would not expect the NHL to wait for Seattle. The Hansen Group has mentioned they would be willing to work with an NHL partner, but their track record so far tells a different story. Each of the known prospective NHL Seattle partners, Don Levin, Ray Bartozek, and Victor Coleman, have been unable to reach terms with the Hansen Group. By adding this KeyArena component, he just increased the cost of business for any prospective partners.

What does Hansen have to lose?

In short, nothing. Worst case for Hansen is that the situation remains status quo and the city rejects/ignores his proposal and continues to go down the path with an NHL/NBA arena in Seattle Center with OVG. Best case for him is that the city rejects the OVG NHL/NBA solution and gives Hansen 5 more years to wait for the NBA to either expand or relocate a team to Seattle. He will also need to acquire a whale of an NBA partner and if he can’t strike a deal with the economic proposal of both SoDo and KeyArena, he can go back to the City to request a more appealing deal to lure the NBA. By that time, the NHL will have probably expanded to 32 teams somewhere else.

Seattle Partners pull out of KeyArena bid process

Seattle Partners, a partnership between AEG and Hudson Pacific, announced in a formal letter to the City of Seattle that they would be pulling out of the KeyArena remodel process. On the surface, it appeared to be a surprise, but to those of us that have been following the story for a while know that AEG was on the cusp of losing the bid anyway. They could have bowed out gracefully, but they decided to take a scorched earth approach to announcing their exit.

The mayor responded to the letter with a statement of his own:

Ed Murray

Seattle Mayor Ed Murray

“It is unfortunate Seattle Partners chose to pull their proposal. As recently as May 19th, Seattle Partners stated in a mass email: ‘We applaud the City for executing a thoughtful public process. Engaging with teams from the City and the public has strengthened our proposal and crystallized our approach.’ We hope to continue our current relationship with AEG and look forward to addressing our path forward on KeyArena, as well as our commitment to engage the community, in the coming days.”

 

And then there was one…at KeyArena

That leaves OVG as the remaining bidder on the KeyArena remodel. It has been rumored that we were going to hear an announcement as early as this week. John Shannon from Sportsnet tweeted that OVG would be in town on Monday (the 5th).

Sodo and KeyArena

Assuming OVG can strike a deal with the City, this will now set the stage for a SoDo/KeyArena showdown that should really be interesting. There are so many differentoutside dynamics at play here; it is impossible to predict. Ultimately, I believe it will come down to the following questions:

Who has the money to build the arena? As part of the KeyArena RFP process, OVG needed to demonstrate the financial means to deliver on the project. Meanwhile, the Hansen group has not revealed how they are financially structured since Ballmer left the group.

Which arena group has support of the leagues? There has been a lot of speculation that Hansen does not have the support of the NBA, but that has never been confirmed by the NBA. Time heals all wounds, so if this really is an issue, it could be fixed. OVG’s CEO, Tim Leiweke has deep ties to both the NBA and NHL, so his relationships seem solid. That said, I expect the City of Seattle to be in contact with both leagues to confirm either or both potential arena partners have the support from both leagues.

Who has a potential NHL ownership group? Both groups have acknowledged that they are talking to potential NHL ownership groups and for all we know, they could be talking to the same groups. Maybe a bigger question is how much this needs to be solidified to decide SoDo vs. KeyArena.SeattleArena

Has Hansen done enough to alter the vote on a street vacation? Since the street vacation vote was denied by the city council last year, Hansen has announced his intent to pull the need for public financing. In my eyes, that is a moot point since the public financing was always tied to procuring an NBA franchise, which was not going to happen before the MOU expires in December.

How this all plays out is anyone’s guess, but it certainly feels like we are closer to getting a viable arena plan that can support an NBA and NHL team. Take that last sentence with a grain of salt, since I’ve said that before.

Oak View Group round up and Bettman comments on Seattle

The Oak View Group’s Tim Leiweke was in town and made a couple key stops to speak with sea_key_arena_entrthe Seattle Times and King5’s Chris Daniels. As you might recall, the Oak View Group is one of the two expected bidders on the KeyArena redevelopment RFP that could host both an NBA or NHL team. Before today, it was assumed that either AEG or OVG would be the operators of a remodeled KeyArena and not the owners of either an NHL or NBA franchise.

Seattle Times Article

The Seattle Times was definitely an enlightening read, filled will lots and lots of quotes from Leiweke himself. I urge you to read the entire article to make sure not to take my thoughts below out of context.

Here are some of the article’s highlights:

“We believe it’s going to take three or four years, preferably three,’’

My take: Seems pretty optimistic based on the snail’s pace that the SoDo project has gone. However, this is a project the city initiated vs a developer initiated project; the city might be a little more inclined to expedite the process to meet their timeline. There wasn’t a whole lot of urgency from Hansen after the Sacramento deal fell through. I honestly have no idea how long this will take. Seems like arenas can go up in a hurry, if the partners are motivated.

Leiweke said he’s in constant contact with Bettman and NBA commissioner Adam Silver and has been assured there is no imminent expansion or team relocation on the horizontimliewikeandgb for either league.

My take: Both Leiweke and AEG have strong relationships with both NHL & NBA and so I would expect both Oak View and AEG to be in lockstep with the leagues. I see this as a competitive advantage these guys have on bringing either an NHL or NBA team to Seattle over Hansen.

“I think that there are certain leaders in this community that finally took a step back and listened to Adam Silver when he said ‘There’s no expansion coming, and we’re not giving a team to Seattle right now because there’s no team moving.’ I don’t think that’s politics. I think that’s the reality of understanding the truth. And I personally believe you’ve been misled.”

My take: This isn’t really anything new. Other than an isolated report several months back reporting that expansion was happening, the league and owners have consistently said there will be no expansion anytime soon. Of course, we heard that for about 2 years leading up to the NHL’s expansion process, so it is within the realm of possibility that the league could do a 180 on this in one day. With no mention during Silver’s presser at the All-Star game and now this, it still feels NBA expansion is a ways out.

Speaking about Hansen’s attempt to buy and move the Sacramento Kings to Seattle, Leiweke said. “I don’t think that was a good day for Seattle, and I’m speaking just as a (Toronto Raptors) member of the board of governors at the time and watching that. … You don’t threaten (then-NBA commissioner) David Stern. And I’ll leave it at that.”

My take: Hmmm…there is some smoke there, but hard to know what Leiweke was talking about. Sounds like there might still be some fence mending that still needs to happen between Chris Hansen and the NBA. I’ve heard the NBA is still reluctant to deal with Hansen, but I never could substantiate that theory, so I’ve largely dismissed it. This does not validate it either. But there is something going on here between the NBA and Chris Hansen.

King 5 Piece

Later in the day, Chris Daniels from King5 published this article. The story line was similar to the Times piece with a couple added thoughts. (full interview posted here.)

Speaking about the traffic conditions down there, Oak View Group’s Lance Lopes said, “Frankly, a lot of it is based on misperceptions.  A great example: Mercer mess. If you go to Mercer at six o’clock at night and look at what the westbound traffic looks like, it actually flows quite well. Eastbound is difficult, we’re actually not going eastbound, we’re having people coming in to that area.”

My take: I travel westbound on Mercer a couple times a week between 4 and 6 from I5 to 99 and it does flow relatively well. How it will perform when there are high capacity events at KeyArena could be a different story. Then again, traffic in Sodo also increases dramatically for events at Safeco and Century link field.

“(Bettman) is fully dedicated to finding a solution in Phoenix. We cannot and we will not ultimately go prey on trying to move franchises. That was a major mistake and we will not make that mistake.”

My take: I know there has been some speculation that the Coyotes might move here, but I’ve remained pretty consistent that this will not happen. The NHL has proven that they will do everything they can to keep the team somewhere in the greater Phoenix designated market area (DMA).

Bettman in Vancouver

Coincidentally, Gary Bettman was in Vancouver last night and was asked about Seattle. Bettman says “We aren’t paying a lot of attention to it because there is no building.” He then proceeds to name all the players trying to get an arena deal done….but he’s not paying attention. This is as good as it will get from the Commissioner. I would love to hear a statement from both leagues saying that they are in regular communication with AEG or Oak View Group to ensure that the RFP responses can work as a long term home for both the NHL and NBA, but we will never get that from a commissioner until the opening faceoff or tipoff.

The arrival of Leiweke and AEG on the scene can only help the situation. Getting some honest and candid comments from any of the arena players is refreshing and I anticipate we will continue to hear more and more from AEG, Hansen, and maybe some potential NHL team owner one day.

Let’s view this as a significant progress report that people are talking to the leagues and working though some of the unique challenges with a redevelopment of Key Arena.

Sodo opponents still lack facts

Since the very beginning of the Seattle Arena plan, the most vocal opponents have been the Port of Seattle and Seattle Mariners.  In the 3 years I have been following the story, they have never produced one piece of data or evidence that the Stadium district cannot sustain a pro sports arena.

Port of Seattle

The port claims that the street vacation will negatively affect the flow of traffic for shipments in and out of terminal 46. In the 3 years of their opposition, we have never seen any data to support their claims of rhetoric and objections.

Here are some ideas we should be asking the port:

  • What does the seasonality look like of your container traffic at terminal allegedly impacted by the street vacation?
  • What does daily traffic flow look like by hour?
  • How long does it take to get a container off a boat? how long does it take to get loaded on a truck? How does this compare to the potential traffic caused by vacating Occidental Ave?
  • How long does it take a loaded truck to get in and out of the port, once inside? How far is the typical distance a truck takes the container once outside the port? How long does that take?
  • How does the port function during the 81 Mariner games a year?

The Mariners

The Mariners opposition is disheartening to say the least. Obviously the NBA and NHL play opposite of baseball season and the overlap can be mitigated like it is done in Philadelphia where all 4 teams play in one location. Additionally, the Mariners average sodosports comps50% higher than projected arena attendance than the Sodo Arena so it is illogical to think that a Mariner game of 30,000 can work in Sodo but a basketball or hockey game of 17,000 would impact the Port. The reality is the Mariners are scared. They’ve had continued sliding attendance and realize that another sports team in town could and should be considered a competitive threat to their marginal product.

SonicsArena Group

In the meantime, the SonicsArena group has gone in front of countless city council and committee meetings, gone through a 2 year Environmental Impact Study with public transparency through the entire process. The results of the study have concluded that the Sodo Arena will have no material impact on the Port that is supported by data.

The homestretch for the Sodo Arena

I will cut to the chase really quickly. The SoDo Arena project has one last hurdle to be shovel ready. Here are two things you can do to help out:

  1. Sign the SonicsArena petition.
  2. Show up to the Seattle City Council public hearing on the Street Vacation at Occidental on March 15th.

For a little more narrative…keep reading.

The Seattle Arena project in SoDo that was kicked off around December of 2011 is closing in on the final steps for approval. The only remaining obstacle is a city council vote on a street vacation of a stretch of Occidental just south of Safeco field. The city council vote is being projected on an estimated date of April 24th with an important public hearing on March 15th.  The street vacation was part of the 2-year Environmental Impact Study (EIS) that found no major findings that would stand in the way of arena construction. The streetSeattleArena vacation has already received recommendations / approvals from the Seattle Design Commission, Downtown Design Review Board, Seattle Department of Transportation, and the Mayor as part of the normal process with the City Council vote. It is seen as the last step before filing for a Master Use Permit to begin construction. Sonics Rising published an great article on what being shovel ready means to the leagues.

The Port of Seattle and the Mariners claim that vacating that block will have a big impact on traffic. I ventured down there to snap some photos over the course of a couple days of all the traffic on that street that will be diverted elsewhere.

 

As you can see, there is not much, if any, traffic that will be impacted, but you should not take a post of phone pictures as proof there is no traffic. You should take the word of a 600+ page Final Environmental Impact study that took close to 2 years that says with some mitigations that there will be minimal economic impact.

NHL impacts

Even though the SoDo arena is being driven by an NBA group led by Chris Hansen, that group has maintained a desire to house an NHL team, as well. Over a year ago, it was reported that Victor Coleman is the potential NHL franchise owner that was looking to partner with Hansen. Coleman has remained quiet on his intentions and dealings with Hansen. Less than 30 days ago he pretty much said no comment to a Business Journal interview on the status of his desire to bring an NHL team to Seattle, but it is clear he has not abandoned the efforts. There has been some speculation that Coleman is waiting for the final vote before going public with his intentions of reaching a deal with Chris Hansen. This might be a little wishful thinking, but we should find out soon.

The bottom line is that the only way Seattle gets a team is if they have a solid arena plan. The Sodo site remains the furthest arena project along and the only one that appears to be moving forward.

 MOU and an NHL first scenario

As many of you are aware, the current Memorandum of Understanding calls for an NBA team before any of the $120M in city bond funding will kick in. What that means in a case of an NHL first scenario is still an open question. It could mean that under the current MOU, an NHL first scenario the arena would need to be entirely privately financed. It could also mean that the MOU would need to be amended to accommodate an NHL first scenario. I am certain the players involved certainly know the steps required to start building and are keeping the matter quiet until we get passed the street vacation vote.

Breaking down the 3 arena options

In case you missed it, Gary Bettman mentioned Tukwila and Bellevue as potential sites for an NHL arena in the Seattle Area on a radio interview in Vancouver. Stick tap goes to Paul Rogers, from SonicsRising.com, for covering the news ahead of our more traditional media outlets. Geoff Baker from the Seattle Times then published this article with a lot more detail on the specific locations. As much as I love the SoDo location, it is great to see that Seattle’s dreams of landing an NHL team are not tied to any one plan. I breakdown the 3 locations by population, income, and driving distance.

Population

Puget Sound Population Map3

Seattle has ~ 6 times the population base of Bellevue. It is worth pointing out that Seattle’s area (142 Sq Miles) is much larger than Bellevue’s (36 Sq Miles). For this reason, to get a fair comparison you could include Kirkland, Redmond, and Sammamish. If you combine those populations, the Bellevue area has ~325K compared to Seattle’s ~650K. The closest comparable NHL market could be Minneapolis-St. Paul. The city of Tukwila is much, much smaller, but based on the location of the reported site, it is literally on the southern border of the Seattle city limits.

Side note: I received over 15 times more responses from people living in Seattle vs people living in Bellevue when I launched my original survey.

Income

We have already established that the NHL fans have the highest income levels of the big 4 Professional Sports Leagues. For income comparisons, I used IRS adjustable income reporting data from 2012 by zip code that I then consolidated into city. I filtered on how many IRS tax returns had an adjustable income of over 75K by city. This is not to say that the only people going to NHL games will be individuals/households that make over 75K a year but a large amount of Season Ticket holders will come from this income bracket.

Puget Sound IRS returns Map

Similar to the population levels, Seattle has a significant amount of households with tax return Adjustable Income over $75K when comparing to Bellevue. However, when you add Bellevue, Kirkland, Redmond, Sammamish, Issaquah and Newcastle, the number is much closer than the population number: Seattle has ~117,000 households to Eastside collective around ~100,000 households.

Distance

Seattle arena map

From a distance perspective, Bellevue and SoDo are somewhat of a wash. Yes, traffic won’t be great regardless of the route, but 10 Miles seems like a reasonable distance to travel to a game for either side of the lake. Certainly, there are more people working in downtown Seattle during the week, but there are obviously quite a few companies located on the Eastside, as well (Microsoft, T-Mobile, Costco, etc…). From downtown Seattle, Tukwila seems like a reasonable distance, even closer than Bellevue.

In a perfect world, a potential owner could obtain some data from a few NHL teams that show the distance traveled from season ticket holders & single game ticket purchases to analyze the viability of the three locations. If I had my pick, I would analyze San Jose, Colorado & Minnesota ticket sales by zip code.

Side note: 35% of respondents to one of my surveys over the summer, sited “Inconvenient Location” as the reason why they did not watch more WHL hockey game.

Here are a few distances for other NBA/NHL arenas:

Canadian Tire Center, home of the Ottawa Senators:

  • 16.6 Miles from downtown Ottawa

St. Paul MN, home of the Minnesota Wild:

  • 12.4 Miles from Minneapolis

The Palace at Auburn Hills, home of the Detroit Pistons:

  • 33 Miles from Detroit

Glendale AZ, home of the Arizona Coyotes:

  • 10 Miles from Phoenix
  • 21 Miles from Scottsdale
  • 27 Miles from Mesa

Sunrise FL, home of the Florida Panthers

  • Sunrise, FL is 31.2 Miles from Miami

 

On an unrelated note and a shameless plug, I am trying to get 100 people to donate $10 to the RMHC of Seattle just so I can donate $1500. Please consider donating

2014 in NHL to Seattle news

January 1st Ed Murray is sworn in as the new mayor of Seattle. During his campaign, Murray pledge to support the current arena MOU but he is not as big of an advocate as the prior Mayor Mike McGinn.

January 30th While sitting on a panel and speaking to students, the Winnipeg Jets Chairman says Seattle is a priority for the NHL via expansion or relocation. He also said Greater Toronto Area could probably hold 2 more teams & Quebec would be great, but neither are top priority for NHL. Separately, assistant GM to the Boston Celtics says the NBA expansion (in the US) is unlikely in 5 years. He later qualified the statement as his opinion and not based on any NBA HQ information.

February 1st David Stern retires. Seattle basketball fans rejoice.

February 2nd Seattle Seahawks win the Super Bowl. 3 days later close to 750,000 fans trek downtown Seattle for the parade. #SportsTown.

February 3rd NHL Expansion talk begins to heat up. While talking to TVA Sports, Gary Bettman had some responses to expansion talk: “we aren’t there yet” “lots of places have expressed interest” “we are always listening”. (These would be common quotes over the reminder of the season).

February 12th New NBA commissioner Adam Silver clearly states there are no plans to expand.

February 13th NHL says Seattle would be a “good hockey market”.  Two days later, Former Seattle Junior Hockey Player TJ Oshie wins a big Olympic game for US in a shootout against Russia.

February 26th A Seattle delegation of business folks plus city and county officials visit Vancouver and attend a Canucks game to learn more about what it would look like should Seattle land an NHL team.

March 17th The first reported delay of the current Environmental Impact Statement for the SoDo Arena. IMHO the EIS is not the long pole here but it is part of the process. The city will not kick in any financing without a team. http://www.king5.com/story/local/2014/12/29/13403682/ I posted this image on March 17th…sadly, not much has changed (except for the Ballmer thing).

March 18th Seattle City Council president, Tim Burgess states that they will not change the MOU (for a NHL first scenario) stating that the tax revenues would be 50% less.  It is unclear how those numbers are calculated when the NHL has higher ticket prices and higher attendance than the NBA.

April 26th Seattle Times reports that Ray Bartoszek is looking at options since the SoDo site is tied so heavily to the NBA which doesn’t appear to be headed to Seattle anytime soon.

May 13th In one of the strongest signs of the NHL’s interest in Seattle, it is reported that Gary Bettman and Bill Daly met with City and County officials in Seattle. By all reports, it sounded like a disappointing meeting for the NHL brass as the arena situation was described as “unsettling” by Daly.

May 15th As a follow up to the NHL and mayor meeting, Victor Coleman and Jonathan Glaser emerge as a new ownership group vying for an NHL team in Seattle.  Coleman and Glaser with in the meeting with the Mayor, Bettman and Daly. They appear to be the front runners for owning a team in Seattle.

May 29th Steve Ballmer starts the process of buying the Los Angeles Clippers. This should be seen as a neutral to slightly negative on Seattle’s pursuit of getting an NBA team.

June 2nd Prospective Seattle Supersonics owner and the man leading the SoDoArena, Chris Hansen sits down with Chris Daniels of King5 and says that an NHL first scenario would require a potential NHL owner to put in a combination of more money and more risk. (Sorry, link has changed since I originally posted).

June 9th Posted the results from the 1st NHL to Seattle Survey. ~35% of respondents in King, Pierce or Snohomish county say they would be season ticket holders.

June 10th Chris Hansen signs an option for more land in SoDo area near proposed Arena. It is speculated this was done to accommodate some of the EIS feedback received to accommodate more parking.

June 26th NHL Board of Governors meeting comes and goes with no expansion announcement.

 July 31st AHockeyView_SonicLevel3nother reported delay in final EIS.

 August 11th Toronto Blue Jays came to town and out come the Canadians.

 August 26th Report surfaces that the NHL will expand by 4 teams in 2017. NHL would come out to deny it and I had my doubts about the original source.

August 28th In an interview with KJR, Steve Ballmer says, “ there is a guy pushing hard for hockey (in Seattle)”. ~58 minute mark.

September 30th Chris Hansen submits final paper work for EIS.

October 24th Although rumored for months, the first legitimate report of Vegas being a potential NHL mark surfaces.

November 25th Sports Business Journal post their annual reader survey. 43% of readers think Seattle is the most viable market for an NHL team.

December 3rd I wrote this interesting post that sizes up the Seattle Market.

December 8th NHL gives approval to prospective NHL Vegas owners to begin season ticket drive.  No other markets are mentioned.

That leaves us here…which is pretty much where we started the year.

NHLtoSeattleOpenItems